Ten Things To Consider When Buying Orlando Property  

1.  Understand and set your personal goals.

Florida boasts about its year-round climate which entices more than 84 million people worldwide to this sunny state every single year, with approximately 50 million coming to Orlando.  British people are attracted to Orlando, Florida due to the fact that they feel very comfortable here and they feel they are getting their money's worth.  The Orlando, Florida culture is very similar to that of the U.K. and due to the recent economic downturn they have been able to acquire some great discounts on new properties.

As a British person seeking to purchase a home in Florida, it is very important that you understand what you're looking for in terms of your needs, location, financial goals and specific type of property.  Are you searching for an investment property in a short-term rental community, close to the attractions such as Walt Disney World?  Or is your goal more of retiring in a condo in a golf resort?  Understanding and prioritizing your own needs will help set you on the correct path in purchasing the right home to achieve all your goals and real estate needs.

2.  Location is everything!

Central Florida is the most favorite destination for British people, and Orlando is the Big Red X on their treasure map.  Due to the number of attractions in Central Florida and specifically in Orlando, this area is a go-to destination for millions of families.  Orlando alone is home to more than 110 golf courses, Disney World, Universal Studios, Busch Gardens and Sea World.  There's also numerous shopping malls and outlet stores in the area, offering everything from high-end fashion to high-end designer brands.  Remember that location is everything when purchasing any type of property.

3.  Real Estate Agent, Real Estate Broker or Realtor?  Which one do I need?

In the United States, estate agents are known as real estate agents or real estate brokers.  Then there are also realtors.  The terms are not necessarily interchangeable.  Although both are licensed to sell real estate, the basic difference between a real estate agent and a realtor is that a realtor is a member of the National Association of Realtors and must adhere to the association's code of business ethics.  All licensed agents are required to take continuing education courses approved by their state licensing boards.  To retain membership of the National Association of Realtors, realtors are required to take additional continuing education classes, which is of vital importance to keep on top of an ever changing market.  When searching for a realtor/real estate agent to guide you through your property search and property purchasing process, the first and most important task is to research your particular agent.  You may come across agents who have a fantastic track record of buying and selling homes in Orlando, but their success may be from working with natives and they may have little to now experience with working with foreigners.  Locating an experienced agent who has a successful track record of helping British nationals to buy the right home in Orlando is the key.  They will be able to guide you through the entire purchase process and understand the challenges that their British clients could encounter compared to an American buying a home.  A well-versed agent can give you invaluable advice, guide you to the right areas of Orlando to meet your real estate and financial needs (such as homes zoned for short-term rentals) and keep the process moving when you are not able to be present yourself.  This type of agent will have great connections and will direct you to the right people, such as attorneys, mortgage advisers, immigration lawyers and money transfer services.

4.  What is a buyer agent contract and should I sign one?

Once you have chosen an agent, you may be asked to sign a buyer agent contract (also known as a buyer agency agreement.)  Just like a contract a seller has with an agent to sell their home, a contract may be required for an agent to represent a buyer.  The contract is in place to protect both parties.  For the agent, it is security that you are only working with them and no other agent, and it details the compensation they are to receive upon closing of a property your purchase.  For the buyer, the contract holds the agent to their fiduciary duties, including fidelity, honesty, dedication to purpose and acting in the buyer's best interests.  The contract also prevents the agent from representing the seller and a buyer in a transaction, ensuring that they are truly looking out for their client's interests.

You don't have to sign a buyer agent agreement if you don't want to.  However, most agents will want some sort of agreement in place before they put in any time and money.  Remember, no money ( commission) is due to the agent until the deal closes.  If you have no contract, you are free to change agents at any time or even work with multiple agents.  But agents do not like having a client working with several agents at the same time, as this can lead to complications.  For example, an agent can show a buyer a home, but if the client decides to put in an offer on that home using another agent, technically the first agent is due the commission, as he/she presented that property first.

Therefore to avoid complications, it is advised that buyers should research different agents to find the right fit for you, and secure a buyer agent contract that clearly defines the duties and expectations of the buyer and the agent.  See box at the end of the feature for a summary of agent and buyer duties. 

5.  The MLS explained...

The system of buying a house in Florida is completely different to that in the UK, and there are several pitfalls which all home-buyers must be aware of.  In Florida, all properties that are being sold through a real estate agency are listed on a central database known as the Multiple Listing Service, the MLS.  The MLS is available to all agents and realtors, and can be viewed on all property websites fed by the MLS.  Many home buyers become confused with the sharing of listings.  You may be on a website for Frank in Florida Realty and see an abundance of listings.  However, these may not be Frank's listings.  Many websites try to overcome such confusion with "search listings" and "my listings" pages.  Another important fact:  you do not have to go to the listing agent of a house to view it.  The primary focus in America is for buyers to find the right agent to guide them through the purchasing process.

6.  Making an offer

You've found the perfect house and you want to submit an offer.  Your agent will draw up an offer known as a "contract to purchase real estate."  This will detail items such as the offer price, the time frame for closing, whether you are paying cash or obtaining financing, conditions such as home inspections and any seller concessions.  You will also need to provide a small goodwill/good-faith with your offer, usually between 1 per cent and 3 per cent of the purchase price.  This lets the seller know that the offer is genuine, true and you are a serious buyer.  If the offer is accepted, the contract is signed and it becomes legally binding.  Failure to observe dates stipulated in the contract can result in you losing your deposit.  A good buyer's agent will keep a close eye on these dates and request extensions if needed, to avoid you losing your deposit.

7.  Home Inspections

Buying a house is one of the biggest financial decisions anyone can make.  Buying a house in another country is an even bigger decision, and so due diligence prior to closing completion is strongly advised.  Ensuring the property you are in the process of buying has no material defects, through a thorough home inspection, is just one of the many ways you can protect yourself.  Failure to inspect a property can leave you with no legal remedy against the seller.  While a house may look like a dream home, only a competent home inspector can make sure you're not signing up for a nightmare.  An inspection should be conducted to look for the following issues: pests, such as termites; soil settlement, drainage or erosion problems; noise and odor; the presence of, or conditions that could lead to mold, and foundation/structural integrity.  All heating, cooling, electrical and plumbing systems should be inspected as well.  To find a thorough and reputable home inspector, start by asking your agent for a list of home inspectors they would recommend; or check out the American Society of Home Inspectors (ashi.org) or the National Association of Home Inspectors (nahi.org)

8.  What is Title Insurance and what does a Title company do?

So what exactly is "Title Insurance"?  When a property is financed, bought or sold, a record of that transaction is generally filed in public archives.  Likewise, records of other events that may affect the ownership of a property, like liens or levies, are also archived.  When you buy title insurance for your property, a title company searches these records to find - and remedy, if possible - several types of ownership issues.  First, the title company searches public records to determine the property's ownership status.  After this search, the underwriter will determine the insurability of the title.  Even the most skilled title processionals may not find all the problems associated with a property, though.  Some risks, such as title issues due to filing errors, forgeries, or undisclosed heirs, are difficult to identify.  So after the title company finishes its searching, it also provides insurance title policy that will help you from a variety of issues that might be uncovered later.  If you take out a mortgage loan when you buy your property, your lender will require a loan policy of title insurance.  This protects the lender's interest in your property until your loan is paid off or refinanced.  On the other hand, an owner's policy of title insurance insures your ownership rights to the property.  Even though you'll pay for this policy only once, your coverage will last as long as you own your home.  A real estate purchaser may be the largest financial investment you ever make.  So, when you buy an owners policy of title insurance, just think of it as buying some peace of mind.  Buyers will need to employ the services of a title company.  Once an officer is accepted by the buyer, the title company will carry out thorough checks on the property's title and deeds for any liens, and fixes any problems that may arise.  Once the title company has recognized the legitimacy of the title and identified any liens against the property, the title company will issue an insurance policy.  The insurance policy provides protection for the property during the purchase process, right through to the date of closing on the home.  This is known as an insurance binder.  This policy will only be effective until the closing is complete and a fresh title is issued to the new owners.  The key requirements of the title company, after the binder has been issued, is to facilitate a smooth closing of the property while ensuring that the purchase is processed correctly.

9.  Closing costs or buying expenses

Closing  costs are miscellaneous fees charged by those involved with the home sale, such as a title insurer and notary fees, title insurance premiums, transfer taxes, property taxes and mortgage fees, if applicable.  If you are buying a home with a loan, you should allow for 4 - 5 percent of the purchase price for closing costs.  For those paying cash, you should plan to set aside 1-2 per cent of the sale price.  When buying a property with a mortgage, it is important to ask your lender for a "good faith estimate".  In additional, the day before the closing, as your lender for the settlement statement.  This is the statement that will be used at the closing, and states the final amount owned for closing costs. 

10.  Can I get a mortgage, or should I pay cash?

 If you are in a position to pay cash for a property, it is often recommended to go down this route.  In some parts of Orlando, in particular in condominiums close to the attractions, only cash offers are accepted, and banks are not willing to finance condos used primarily for short-term rentals.  Even if you are looking to move in yourself fulltime, the complex will have an owner-occupancy level required by the bank to obtain finance.  It is important to meet with your mortgage broker who specializes in overseas mortgages and to let them explain your options to you.  If you decide to obtain finance in the US, the type of financing available varies depending on your country of origin and visa status.  Most foreign buyers should prepare for a 35-45 per cent down payment, and budget for 6-24 months of mortgage payments in reserve in a bank account.

Agent Duties:

  • Use all avenues to find properties that meet the buyer's needs.
  • Arrange buyer viewings of properties.
  • View properties on behalf of the buyer, in their absence, and take photos and or videos.
  • Attend any and all inspections of a property should the buyer request this from agent.
  • Negotiate contracts on behalf of the buyer/s.
  • Do not disclose any confidential information made known by the buyer.
  • Assist the buyer in obtaining financing.
  • Disclose to the buyer any and all information that would affect the buyer's decision to purchase.
  • Buyer Duties
  • Provide agent with the most recent and correct financial information to research appropriate properties.
  • Work exclusively with their agent to find a property during the term of the buyer agent contract.
  • Communicate fully and frequently with the agent.
  • Co-operate fully with the agent, so he/she may fulfill the terms of the agreement